Managed Service Provider (MSP) acquisitions are powerplays to smash the competition and stay ahead of the curve. Peer pressure has never been so critical in the IT services market. Kaseya has made a deal worth $6.2 billion to purchase Datto.
Talking about the deal US itek CEO David Stinner said, “this deal topples ConnectWise as the king of all the hill of the MSP market. ” US itek Inc. specializes in the selection, implementation, and support of Microsoft Server Solutions and all the related Business and Medical Technology to solve the needs of small and medium-sized businesses in the Buffalo Niagara Region.
The $6.2 billion deal has had the same impact as “when Tech Data bought SYNNEX and became the No. 1 distributor. ” Kaseya and ConnectWise support over 2,000 SMBs and have a vast market impact. Stinner was a ConnectWise partner for more than 12 years, along with Kaseya’s partnership for the last seven years. Stinner shared his thoughts on ConnectWise’s post-private-equity-acquisition by Thoma Bravo in 2019. It took place when news of the pandemic started to surface. Kaseya’s Datto acquisition is making headlines in the MSP market as it truly is big news. The deal offers $35.5 per share and brings Datto under private ownership. The deal was led by Insight Partners, one of many that the firm has undertaken over the years. Organisations that have never heard of MSPs have heard about Kaseya, which reflects the kind of impact it has had in the market. The remote monitoring system and management VSA platform were hacked last July and became prone to one of the biggest ransomware attack sprees.
The offer represents a 52% premium to Datto’s unaffected stock price of $23.37 as of March 16, 2022. The software maker is still looking for options in the sales category. Kaseya’s backup by Insight partners provided a flawless piece of transition. Helping hands also included big names such as TPG Capital and Temasek. Private equity firm Visa Equity Partners owns 69 per cent of Datto Shares from last year.
On Monday, Datto share prices went up 20 per cent to $34.59 in New York trading. The company currently has a market valuation of $5.7 billion. Kaseya, on the other hand, is based in Miami, FL. The company managed to raise more than $500 million in 2019 from TPG and Insight Partners backers. Data is prone to change, and as the coronavirus took over, its activities started to gain further momentum. This translated into an additional revenue stream. As competition is a massive part of the business, Kaseya’s move is appraisable to stay in the game.
Kaseya CEO Fred Voccola said they are “not buying Datto to destroy it, ” but it would help them invest in the products that support business. “We’re buying Datto because we want to get better at that, and Datto is the best, so we buy the best. ”
Kaseya is a premier provider of IT management and security software for MSPs. MSP support for SMBs is a great way to achieve success in the tech space as it lets companies invest less to get more. Individual feature adding is a tedious and expensive process. MSPs are the backbone of the support category. With a $6.2 billion price tag, a 52 per cent premium is paid to Datto’s unaffected stock price. Datto has a legendary commitment to its customers and employees, and the alignment of the missions of the two companies make them a natural fit.
Kaseya’s website talked about the acquisition. To achieve world-class customer experience and support, “Kaseya’s complementary products and strategies that drive innovation and global market development” will come in handy. While neither Datto or Kaseya seem to have plans to close offices, Kaseya holds the right to manage teams under the new structure.
Integration between the two companies already exists. Both will enhance integration features and build new ones in the coming months. It will ensure a seamless experience for all the customers.